Accounting Multiple Choice Question – 12 September 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Accounting

A VAT-registered car dealer allows a customer £6,500 (including VAT at the rate of 21%) for his used car as a trade-in against a new car, the retail price of which is £15,000 (including VAT at the rate of 21%).

As a result of this transaction, the car dealer is liable to pay VAT of ….

Select ONE answer:

  1. £1,475.21
  2. £1,785.00
  3. £3,150.00
  4. None of the above.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

Net sale incl. VAT = £15,000 – £6,500 = £8,500
Net sale excl. VAT: £8,500/ 121 * 100 = £7,024.79
VAT on net sale = £7,024.79 * 21% = £1,475.21

  1. Correct
  2. Incorrect
  3. Incorrect
  4. Incorrect

 

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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